The importance of strategy and transparency in times of corporate crisis

Corporate crises have become more difficult to control with the increased use of social media platforms. Crises are able to spread more quickly and widely which has increased companies’ vulnerability. It is essential for crisis managers to integrate social media into their crisis response strategy and to understand how their crisis communication efforts can impact consumer perception. This research has aimed to answer the following question: To what extent does message transparency (high vs. low) and crisis response strategy (denial vs. bolstering vs. rebuilding) affect consumer perception in a preventable corporate crisis on social media? The quantitative research method utilized in this study is an online experiment in the form of a survey. It was conducted to yield a sample of 251 respondents. The study design consisted of 1 (crisis type: preventable) X 3 (crisis response: denial, bolstering, rebuilding) X 2 (message transparency: high and low) between-subjects design. Existing literature on effective crisis communication usually compares rebuilding, denial, and diminish crisis response strategies. The bolstering crisis response strategy is often neglected. Examining this particular crisis response strategy on social media and its effectiveness in comparison to other strategies could be valuable to crisis managers. Moreover, message transparency in times of crisis and how it can influence consumer perceptions has also not been covered extensively in academic research. The influence of message transparency on the effectiveness of a bolstering crisis response strategy is yet to be known. The findings have shown that crisis response strategy affects consumers’ negative word-of-mouth, but not purchase intention. Specifically, a denial crisis response strategy was shown to result in a lower level of negative word-of-mouth than a rebuilding crisis response strategy, in a preventable crisis. This is not in line with recommendations made in the SCCT. Moreover, a rebuilding crisis response strategy resulted in a lower level of negative word-of-mouth than a bolstering crisis response strategy, in a preventable crisis – which is in line with recommendations made in the SCCT. The measured difference was however very small. Furthermore, there was no significant effect found for crisis response strategy with respect to respondents’ purchase intention. The findings show that negative word-of-mouth does not translate into the respondents’ behavioral intentions in the form of purchase intention. Finally, there was no significant moderating effect found for message transparency but this could be due to the fact that the manipulation check for the ‘message transparency’ variable failed.